FDIC Recommends Overhauling US Bank Insurance (Suggests "targeted" coverage)

[mountaineer]

FDIC Recommends Overhauling US Bank Insurance
Monday, 01 May 2023 02:43 PM EDT

The Federal Deposit Insurance Corp. is recommending the U.S. rethink its decades-old policy of insuring up to $250,000 in bank deposits and replace it with an overhaul that would allow regulators to cover higher amounts on a “targeted” basis.

The proposed change appears to openly acknowledge that the FDIC is looking for ways to calm both depositors and markets as the organization contends with the third U.S. bank failure this year. First Republic Bank became the second largest failure in history Monday when regulators seized it and JP Morgan Chase stepped up as a buyer.  ...

AP via Newsmax

[Kamaji]

FDIC Recommends Overhauling US Bank Insurance
Monday, 01 May 2023 02:43 PM EDT

The Federal Deposit Insurance Corp. is recommending the U.S. rethink its decades-old policy of insuring up to $250,000 in bank deposits and replace it with an overhaul that would allow regulators to cover higher amounts on a “targeted” basis.

The proposed change appears to openly acknowledge that the FDIC is looking for ways to calm both depositors and markets as the organization contends with the third U.S. bank failure this year. First Republic Bank became the second largest failure in history Monday when regulators seized it and JP Morgan Chase stepped up as a buyer.  ...

AP via Newsmax

Bad idea.  Basic deposit insurance should be a set maximum.  If a particular depositor wants his/her/its deposits insured above that amount, then they should be purchasing private insurance of their own.

[catfish1957]

Bad idea.  Basic deposit insurance should be a set maximum.  If a particular depositor wants his/her/its deposits insured above that amount, then they should be purchasing private insurance of their own.

If someone is stupid enough to leave more than $250K per depositer ($500K as joint account), in any bank, they really don't deserve subsidized insurance.

[Kamaji]

If someone is stupid enough to leave more than $250K per depositer ($500K as joint account), in any bank, they really don't deserve subsidized insurance.

Exactly.